When Two Heads are Better

The Jobs Of R&D Presidents Are Hard, and getting harder by the day. To guide their labs toward the most promising avenues of research, they have to keep up with the rapid pace of scientific progress. At the same time, as the chief executives of complex, technology-driven (and frequently international) organizations, they are involved in many non-scientific operational and organizational issues. R&D presidents—and frequently the leaders of discovery, pre-clinical, and development—wear two hats. They're chief science officers (CSO) and chief operating officers (COO).

Two Facets of R&D

Senior R&D leaders face the unenviable choice of either dividing their time and attention between these two areas, or focusing on one to the detriment of the other. Most have rightfully prioritized science ahead of operations. As a result, scientific issues are well defined in most R&D organizations— although far from resolved. (See "In the Eye of the Storm" Pharm Exec, April 2003.) Operational issues, on the other hand, have received significantly less attention.

The situation is exacerbated by the fact that, in many biopharmaceutical R&D organizations, responsibility for operations is fragmented among many executives. This makes it difficult to conceive and implement comprehensive solutions. Yet, given the unrelenting pressure to bring new therapies to market rapidly and at reasonable prices, R&D organizations can no longer afford to focus on science to the exclusion of operations. To launch new therapies ahead of competitors, they need to excel at both.

A second factor is the increasingly stringent regulatory climate. Clinical trials have become significantly larger and more complex over the last decade, and regulatory considerations have been a major contributor to the trend. New regulatory requirements, such as Part 11 compliance, also have had a direct impact on operations.

Third, as biopharmaceutical companies have worked to reduce costs by moving operations, such as data management or lead optimization, to faraway places, they have expanded their R&D footprints. They also have significantly increased the number of countries in which they conduct clinical trials, in order to gain access to investigators and patients.

Finally, the movement away from traditional blockbuster drugs to more personalized medicine means that R&D portfolios include a larger number of drugs.

From Old to New

It would be quite unusual for an R&D head, however smart and industrious, to excel at both the CSO's job and the COO's. For many companies, the best way to improve performance would be to appoint a COO of R&D to manage operations in discovery, pre-clinical, and development, and take responsibility for support functions such as informatics, finance, and human resources. (See "From Old to New") The president, meanwhile, can focus on scientific matters.

Large, global labs may consider replicating this structure one level down and appoint COOs for discovery, pre-clinical, and development to support the COO of R&D. Labs that look to significantly improve their performance, or that are experiencing rapid growth, will benefit the most from this approach.